TRIBUNALS CANNOT CONSTRUE TERMS UNDER EMPLOYMENT RIGHTS ACT PART 1

05 January 2011

A Law Bulletin from Daniel Barnett has provided a case summary confirming that Employment Tribunals have no power of contractual interpretation outside the context of breach of contract claims raised on or after the termination of employment.

The claimants in the case Southern Cross Healthcare v Perkins and Others are employees of the appellant who were all entitled to five days of additional holiday each year for long service, over their standard contractual entitlement. The Working Time Regulations 1998 were then amended to increase the minimum statutory annual leave allowance. Accordingly, the appellant increased holiday allowances to 28 days for any of its employees whose entitlement was less than that (including the respondents). The claimants brought proceedings in the ET arguing that they should still be entitled to their long-service uplift on top of the statutory 28-day minimum. They succeeded in the ET and the EAT.

In allowing the employer's appeal on the basis that the ET had no jurisdiction under the Employment Rights Act 1996 (in particular sections 11 and 12) to construe the holiday provisions of the claimants' contracts, Maurice Kay LJ (who delivered the judgment of the Court) applied obiter passages of the Court of Appeal's decision in Mears v Safecar Security Limited [1982] IRLR 83.

Note that the alternative remedy of a breach of contract claim was not available in the ET because the employees remained employed by the company. Accordingly, the proper forum for the claims was the County Court. If they had no longer been employed, the ET could have construed the holiday provisions under its breach of contract jurisdiction.